Saturday, May 19, 2012

Social Security tax needs to be reformed

Rightardia has talked about this several times. The Social Security cap makes Social Security tax the most regressive federal income tax of all. 

The Federal Insurance Contributions Act (FICA) authorizes a payroll tax that pays for both Social Security and Medicare. 

The cap has become a political football when the president is Republican.

The cap should be abolished and 100 per cent of Income should be taxed to pay for Social Security as is the case for the Medicare part of this tax. 

This would enable the federal government to actually cut the payroll tax. Employees  pay  6.2% for Social Security plus 1.45%  for Medicare of their paycheck. The employer pays a matching amount, 

Rightardia suspects the Federal government would be able to reduce these percentages if he Social Security tax was reformed to tax 100 per cent of income. 

That will never happen in a the House with a GOP majority. 

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